Fast Moving Consumer Goods (FMCGs) and other retail sector actors are faced with a rapidly changing consumer landscape, which require new corporate and business strategies to stay profitably in operation.
Stakeholders in Nigeria’s consumer goods industry have said demand is yet to pick-up and some FMCG companies have not restocked raw materials because of fluctuating foreign exchange.
Amid these challenges, each consumer goods company will have to deal with some questions and watch trends according to a McKinsey report. Some critical questions to ask are:
What strategic relationships should we seek out and nurture?
In an uncertain and rapidly changing world, partnerships and acquisitions can be especially critical in two areas: better managing the supply chain and coming up with new ideas.
Are there opportunities to integrate up or down the value chain? Partly as a hedge against rising input costs, and more broadly as a means of exerting greater control over the supply chain, some companies are pursuing backward integration. A move in this direction is Zinox, one of Nigeria’s largest technologies companies’ recent acquisition of 99 percent holding in Konga, one of Nigeria’s biggest ecommerce companies as it looks to expand its position.
Who is in our ‘innovation ecosystem’? The most innovative companies regularly tap into external sources of skills and expertise, particularly in areas outside their core competencies. Partners might include “connected home” vendors, research providers, or academic institutions. Today, for instance, Consumer Packaged-Goods (CPG) companies are working with strategic-design firms to identify unmet consumer needs and develop consumer empathy.
Retailers are collaborating with telecommunications providers to create cutting-edge in-store tracking systems and shopping apps. For example, discount chain Target, seeking to grow its grocery business, is partnering with design firm IDEO and the MIT Media Lab to study food trends.
How can we engage consumers in an on-going dialogue?
Especially in an era of fast-changing consumer profiles and behaviours, companies must strive for a thorough understanding of what consumers want and are willing to pay for, and systematically use those insights to inform the evolution of products and brands.
Are we paying enough attention to social media? Recent research proves yet again that social media has a strong influence on purchase decisions: across product categories, 26 percent of purchases on average were spurred by recommendations on social media. As smartphones get smarter and social networks become more sophisticated, it will become even easier for consumers to share their opinions about products and services. Companies cannot afford to ignore these conversations. They should consider investing in ways to listen in on—and, just as important, generate—social-media buzz.
How can we involve consumers in brand innovation? Many companies— Pepsi, and Unilever, to name a few—already use crowdsourcing in one form or another to develop and test new products. The advent of 3-D printing and rapid-prototyping techniques has made it easier and cheaper for companies to test and continuously improve their new-product ideas.
What new consumer touch points can we offer? Companies must meet consumers’ rising expectations for being able to buy what they want, when and how they want it—which means providing a seamless Omni channel experience. They must ensure that consumers have every opportunity to interact with the brand, be it through online or offline channels. For example, Nordstrom customers can buy products not just in stores and on the web, but also on a mobile app, on Instagram, or via text message—and they can pick up, return, or exchange their online purchases at Nordstrom stores.